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Tag Archives: OCC

CoreLogic’s AVMs Comply with New Federal Standards

CoreLogic says its automated valuation models (AVMs) can assist mortgage lenders in complying with the new federal standards on property valuations. The new standards were released December 2 by the five federal bank regulatory agencies, and emphasize the need for risk-focused appraisal reviews, rigorous AVM testing, enhanced documentation of property condition, and valuation updates during the life of the loan.

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New Regulatory Rule to Support Foreclosure-Ridden Neighborhoods

Federal regulators on Wednesday announced changes to the Community Reinvestment Act (CRA) parameters to support communities affected by high foreclosure levels. The final rule encourages depository institutions to finance development projects in areas that qualify for HUD's Neighborhood Stabilization Program (NSP). Institutions will receive CRA credit for any NSP-eligible activities, such as loans extended to grant recipients to buy foreclosed homes or a donation of REO properties to a nonprofit housing organization.

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Federal Reserve and Other Agencies Release New Appraisal Guidelines

Federal regulatory agencies issued guidelines Thursday on sound practices by financial institutions for real estate appraisals and evaluations. The guidelines explain the agencies' minimum standards for appraisals and incorporate the agencies' recent supervisory issuances on appraisal practices. The 70-page document will replace the former guidelines which were written in 1994, and officials say it will ensure consistency in the application and enforcement of appraisal regulations.

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Government Study Finds Banks Rarely Walk Away from a Foreclosure

The Government Accountability Office just completed a study of what is called ""bank walkaways"" - when a lender initiates foreclosure but then doesn't complete the process because the cost outweighs expected proceeds from the property's sale. Officials argue the practice intensifies market deterioration and complicates stabilization efforts. But the agency found that abandoned foreclosures are rare - representing less than 1 percent of vacant homes between January 2008 and March 2010 - but concentrated in specific areas of the country.

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Servicers with Widespread Paperwork Errors May Face Regulatory Fines

Federal banking regulators are in the process of conducting an in-depth review of foreclosure practices at the nation's largest mortgage servicers, which includes on-site evaluations and examinations of loan files. Officials say in cases where problems are found, regulators will require lenders and servicers to correct not only the faulty documents but the faulty systems that allowed them to occur. One Federal Reserve governor says institutions with ""widespread problems"" could also be subject to fees and penalties.

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Lawmakers Call for Federal Foreclosure Investigation

House Speaker Nancy Pelosi and fellow members of the California Democratic Congressional Delegation are petitioning federal regulators and the U.S. Department of Justice to launch a formal investigation into servicers' foreclosure practices. The request was prompted by the recent reports of systemic mishandling of foreclosure affidavits by three major mortgage servicers. Delegation members say they have received thousands of complaints from their constituents, which ""appear to outline a clear pattern of misconduct on the part of lenders and servicers.""

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Bank of America Suspends Foreclosures in 23 States

The nation's largest bank has halted foreclosures in certain states after evidence was disclosed that it too had ill-famed ""robo-signers"" rubber-stamping approvals of foreclosure cases without verifying their validity. Bank of America has placed foreclosure actions in 23 judicial states on hold while it determines if the paperwork was processed correctly and affidavits by staff members were indeed legitimate. BofA is the third major mortgage lender in two weeks to call for a foreclosure freeze.

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OCC Orders Largest Servicers to Review Foreclosure Processes

One of the nation's foremost banking regulators has issued a directive to large mortgage servicers, ordering them to reassess their procedures for foreclosing on defaulted borrowers. John Walsh, head of the Office of the Comptroller of the Currency (OCC) told lawmakers that he contacted seven institutions his agency supervises, after several large lenders announced a halt on foreclosures in states where filings might contain erroneous paperwork and preparers may have broken the law in their haste to process large volumes of cases.

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Regulatory Report Shows Increases in Completed Foreclosures and Mods

The credit quality of first-lien mortgages serviced by the nation's largest banks and thrifts remained steady during the second quarter of 2010, according to a new regulatory report. Mortgage delinquency levels were relatively flat but elevated after rising for several quarters. Completed foreclosures were up by 7 percent from the previous quarter, but mortgage modifications increased 18 percent, and the report found that newer mods are showing significantly lower re-default rates.

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Regulators Unable to Provide Date for Banks’ SAFE Act Compliance

The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) stipulates that residential loan officers at banks, credit unions, and other federally regulated financial institutions must register their names and fingerprints with a national database. Financial institutions must establish procedures for compliance by October 1, 2010, but the deadline by which employees must be registered is unknown, ""because the necessary modifications to the registry have not been completed,"" according to federal officials.

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